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More propaganda on residential electricity prices

More propaganda on residential electricity prices

Business NZ’s claim that residential electricity prices are efficient is the third such propaganda piece in a fortnight. All are based on the Electricity Authority’s failed economic model, and on statistics that are seriously in doubt.

Wholesale prices are, however, well documented. The analyses show that wholesale prices are a mere quarter to a third of the residential power price.

The actual numbers are 7 to 10c/kWh compared to 28.5c. Therefore the Single Buyer proposal by itself won’t fix residential power bills.

It’s retail margins that have ballooned. Companies are increasingly chasing new customers, calling up or going door-to door. The study says that in the last two years there’s been a 73% increase in customers being contacted three times! Nobody’s counting the nuisance value of this to the customers themselves.

In fact, customers are simply switching off. Some because they have insulated their houses or are investing in solar energy or efficient wood burning. Others because they can’t afford it
As a result the living conditions of many would be disallowed by Occupational Safety and Health. Fixing these houses create benefits five times the costs – but the Electricity Authority’s economic model excludes their consideration.

The Business NZ study recommends a new work programme on fuel poverty. Its scope exactly matches that of a $679,000 cross-departmental study launched in 2007 but abandoned in 2010 with no explanation.

The present economic model supports a political strategy of making consumers pay for fancy infrastructure whether they want it or not. Power stations and transmission lines, fibre broadband, roads of national significance, irrigation, and the Sky City Conference centre, all fit this pattern. We pay not only in power and phone bills, but environmental damage and gambling harm.
Voters must decide whether they want these massive symbols of economic growth, or prefer investment to be made within communities, to make efficient use of the resources we all require.


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